Ministry set to overrule CAG, okay DIAL joint ventures

New Delhi: The civil aviation ministry has decided to overrule the objections of the Comptroller and Auditor General (CAG) on GMR's Delhi Airport forming joint venture companies in areas like retail and cargo to enhance its revenues from non-aeronautical streams.
The CAG had asked the ministry to examine the entire issue of Delhi International Airport Ltd (DIAL) forming such JVs as it could lead to loss of revenue for the Airports Authority of India. The agreement between DIAL and AAI mandates the former to share 46% of its annual revenue with the latter.
The apprehension arose because as far as operation and maintenance of airport is concerned the revenue would be shared between GMR and AAI in proportion to their equity stake. But in case of other JVs of DIAL there would be a third party also so revenue of AAI could come down.
Sources said that the civil aviation ministry has brushed aside such apprehensions after seeking the opinion of the attorney general, which states that there's no clause which refrains DIAL from setting up such JVs.
However, the ministry is proposing to specifically lay down the areas where such partnerships can be entered into.
30/06/11 Nirbhay Kumar

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Categories: Airports Jun 2011